The National Credit Bureau may consider shortening the period over which it keeps records of "blacklist" borrowers to encourage bankers to approve more loans to potential borrowers for property projects.

The NCB keeps a record of default borrowers for three years. Some of these borrowers have found it hard to get subsequent loan approval from banks that are reluctant to lend to them due to their previous record.

Niwat Kanjanaphoomin, chief executive officer of the National Credit Bureau Co, was cautious about a campaign launched by the property sector asking the bureau to relax its rules on the credit information about borrowers. The property sector says relaxing the rules would stimulate loan approval and rejuvenate the sluggish market.

Niwat said the records were essential but the agency might shorten the period for which they are kept from three years to two to make the process of approving loans easier.

Several land-developers, who are now facing a business slump, have lobbied the National Legislative Assembly to amend the Credit Bureau Act, which they claim is an obstacle to mortgages.

They want the bureau to delete the histories and credit information of borrowers who have paid back their loans or who have only small debts. They claim banks have denied mortgages to borrowers who have a record of default, obstructing land-developers' opportunities to sell houses or residential units.

Niwat said the  National Credit Bureau kept credit information for three years after ordinary borrows paid their debts and for five years for corporate clients. Non-payment information is kept on the blacklist until debts are settled.

He said the information told how borrowers performed, whether they paid back their debts or not. Credit data that date back more than 12 months can indicate patterns of borrower behaviour and whether they pay back debts on time, he added.

Past information about borrowers is essential for banks when it they consider loan applications, he said.

Adequate information will have positive impact on reliable borrowers, because banks are willing to lend to clients who have a good record of repayment, he added.

He said 90 per cent of borrowers had a good record of debt repayment. If banks do not have adequate information, they may not be willing to approve loans, and an absence of sufficient information could backfire on customers, he said.

In the US, the credit bureau keeps credit records for seven years. No credit bureau keeps records for less than 24 months, Niwat noted.

He said it might be possible for credit information to be maintained for two instead of three years, which might encourage borrowers to repay their previous loans so that banks would receive prompt repayment, a win-win solution.

However, he said it would depend on the decision of the regulators, chaired by central-bank governor Tarisa Watanagase.

The regulators are expected to meet in the next few months to consider the issue, he said.

The National Credit Bureau was established in 2003 with the aim of preventing a recurrence of the massive credit bubble of 1997.

It has information on 46 million accounts of ordinary borrowers and three million of corporate firms. All are clients of financial institutions.

Some credit-regulators have expressed concern about the land-developers' campaign. Regulators do not want to relax credit rules as they believe that adequate data is good for both borrowers and lenders.

Wichit Chaitrong

The Nation